Peabody says UMWA rejected a settlement of retiree healthcare issues

Peabody Energy (NYSE: BTU) announced Sept. 23 that the United Mine Workers of America (UMWA) union has rejected a settlement of all claims, payable over 15 years, which could also have been used to provide 3,100 Patriot Coal retirees with lifetime healthcare benefits comparable to those of Peabody’s active corporate employees.  

Peabody Senior Vice President of Global Investor and Corporate Relations Vic Svec said that the settlement offer could have been used to fund the newly-established Voluntary Employee Beneficiary Association that will provide healthcare benefits to retirees in the wake of Patriot’s prospective emergence from bankruptcy protection. Patriot sought Chapter 11 protection in July 2012.  

“UMWA President Cecil Roberts claims to be concerned about his members,” said Svec. “So why did he not accept a settlement amount large enough to provide 3,100 retirees with lifetime healthcare benefits comparable with those of Peabody’s active corporate employees? The UMWA retirees who have been traveling to St. Louis to rally for healthcare benefits have a right to know that a good faith settlement offer was on the table, and that union leadership rejected it.”

Since Patriot’s launch in 2007 through an IPO by Peabody, the nation’s largest coal producer, Peabody has been funding Patriot’s healthcare obligations for some 3,100 retirees under contractual agreement. The mid-August offer was to settle all claims with the UMWA and the union would not accept these terms, despite the fact that Peabody’s contractual obligation, at any level, has been relieved by new agreements between Patriot Coal and the UMWA, Peabody said.

Fifteen people were arrested in front of Peabody Energy headquarters on Sept. 24 as members of the UnMWA and supporters protested the company’s continued refusal to pay for health care benefits promised to retired miners, their widows and dependents. The arrests followed a march and rally during which more than 5,000 protestors briefly blocked traffic in downtown St. Louis, surrounding the Peabody Energy building at 7th and Market Streets.

UMWA President Cecil Roberts told demonstrators that the fight for health care for retired miners is “a faith-based struggle, a civil rights-based struggle,” with the potential to “turn America around.”

Said Roberts about Peabody’s Sept. 23 statement: “They’re already paying, pursuant to a court order, $20 million a year for 3,100 people. The offer they made to us is for $10 million a year for those same 3,100. No thank you. The people who issued that statement want us to sell somebody out, but we’re not doing that.”

Roberts added: “There are a lot more than 3,100 people that Peabody is responsible for. You can’t settle all the claims, unless you cover all the people.”

Last month, UWMA members approved a settlement with Patriot Coal which made significant improvements over the terms and conditions approved by the bankruptcy court, the UMWA noted. The agreement establishes a mechanism for payment of health care benefits for retired miners. However, long-term funding for those benefits has not been secured.

The union’s ongoing effort to win full benefits for all affected retired miners includes a lawsuit against Peabody and Arch Coal (which also used to own some of the Patriot Coal operations) filed in West Virginia; legislation in Congress to aid retired miners and their dependents, sponsored by both Republicans and Democrats; and an ongoing public education, advertising and community action campaign.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.